With the United States is engaged in a trade war, boatbuilders should develop supply-chain strategies and new markets to offset the impact, according to a former diplomat with the International Trade Administration.
“Boatbuilders need to look at their entire supply chain and start putting together a Plan B,” Rebecca Torres, who recently retired from the ITA as a diplomat with the Foreign Commercial Service, told Trade Only Today. “If this lasts much time, they have to look at sourcing from other countries and selling to other countries.
“I don’t think anyone can wait,” Torres said. “I think they need to put a lot of effort in other markets. It’s like a portfolio; you always want to keep things diversified so if one lags, you have another to fall back on. I’d be putting in some extra hours right now. Maybe it will only last a few months. Maybe it will go on for a year plus, but don’t think we have the luxury, particularly the smaller builders, of waiting around and keeping our fingers crossed.”
Working with companies in the private sector on exports, Torres tried to maintain 20 to 30 percent in sales from outside the country.
“Builders have to have a contingency plan and decide at what point is the pain too much or bottom line eroding too much,” she said. “Depending on how this whole trade war escalates, it could throw us into a recession, and if that’s the case, we really need to rely on some of those international sales.”
Marine manufacturers should develop a diverse portfolio of international markets as a way to mitigate hiccups when they arise, said Julie Balzano, senior director of export development for the National Marine Manufacturers Association.
“Tapping into emerging and second-tier markets has proved to be successful, which is why the NMMA is spearheading this effort with a fact-finding mission to Croatia this October,” Balzano told Trade Only. (Manufacturers can register here.)
“Croatia is on the cusp of becoming an important boating market and gateway for the southeast European region,” Balzano said. “NMMA designed this trip to help our members identify emerging market trends and establish key business relationships in Croatia as their status as an export market grows.”
Balzano added that the NMMA is “compiling a larger list of new markets to pursue in light of the newly imposed tariffs.”